Germany "is the main protagonist" in the euro's crisis and risks inflicting deflation on the European Union because of its insistence on budget austerity, billionaire investor George Soros said.

"As the strongest and most creditworthy country it is in the driver's seat," Soros said in a speech at Humboldt University in Berlin yesterday. "As a result Germany objectively determines the financial and macroeconomic policies of the euro zone without being subjectively aware of it. When all the member countries try to be like Germany they are bound to send the euro zone into a deflationary spiral."